Grand Strand residents can usually come up with a few reasons why they’re glad to live here as opposed to Charleston.
Well here’s another.
CoreLogic, a company that provides data and analysis for the real estate industry, estimated that mortgages in Charleston need to have a 20 percent to 25 percent loan to value adjustment, upwards, to protect against the risk that homeowners will default after a hurricane.
The company said in a recent study that mortgages are calculated to protect the lender against many kinds of risks, but natural hazards aren’t one of them.
It then undertook an extensive study using 1.5 million mortgages and calculated that homeowners in high natural risk areas are twice as likely to default on their loans than those in a low-risk area. That higher propensity for default is slightly lower than the increased defaults due to a lack of equity, CoreLogic said.
While the Grand Strand isn’t immune to hurricanes, historic storm track and storm surge flooding maps of the S.C. Department of Insurance show that hurricanes like the Holy City a lot more than they like the Redneck Riviera. Charleston, in fact, is ranked seventh among 20 metropolitan areas in its need for a loan to value adjustment because of natural hazard risk. It also is just one of three places outside of Florida and California in the ranking.
To be completely fair, the Grand Strand isn’t populous enough to be included in the ranking.
But one look at the state’s storm surge map shows clearly which area is at greater risk. The Charleston area’s storm surge threat is much higher and spreads much farther inland than that along the Grand Strand. In fact, the largest area of threat in Horry County is inland, along the Waccamaw River up to Conway.
The reason for the higher default rate likely is that many homes are underinsured and owners whose property is 100 percent lost in a hurricane but don’t have enough insurance could figure that walking away is best.
“That’s the only reason I can think of,” said Russ Dubisky of the S.C. Insurance News Service.
A recent study by Marshall & Swift/Boeckh said that 60 percent of U.S. homes were undervalued for insurance by an average of 17 percent, which means that their insurance premiums should be higher to replace 100 percent of what owners could lose.
The Milwaukee-based company is a major source for insurers to get replacement cost valuation, Dubisky said, and the study noted that the situation now is a lot better than it was in the 1990s when 95 percent of homes were undervalued by an average of 35 percent.
Days on market
The time between a property’s listing and its sale, the days on market, is improving nationally and in Horry County, but the span in Horry County is noticeably longer than it is across the country.
During July and August this year, according to information from SiteTech Systems, single family homes in Horry County have been on the market for a median of 75 days and condominiums for 78 days.
That’s a drop of eight days for single family homes and a climb of two days for condominiums when compared with the same time in 2012.
Nationwide, the National Association of Realtors reported that the median time on market was 42 days in July, an increase of five days over June, but 39 percent faster than the 69 days on the market in July 2012.
Short sales stayed on the market the longest when the sales were broken into categories, with a median of 72 days between listing and sales. Foreclosures usually sold in a median 50 days, the NAR said.
The association said that in July this year, 45 percent of all homes nationwide sold in less than a month.
S.C. Builder of the Year
The South Carolina Home Builders Association tapped a local as its Builder member of the Year.
Berkley White, vice president of Classic Commercial Inc. and twice the president of the Horry-Georgetown Home Builders Association, will receive the state association’s Thomas N. Bagnal Award at a November awards ceremony.
White is one of six certified master builders in Horry and Georgetown counties and one of 55 in South Carolina.
He has been a member of the Southern Living Custom Builders Program for more than six years and in 2012, was the builder of the Grand Strand’s first Southern Living Showcase Home.
Also in 2012, White won the first Professional Remodelers’ Council Award from the Horry-Georgetown association.
Contact STEVE JONES at 444-1765.